TMI Blog2002 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... , Amritsar (for short, lithe Tribunal"), referred the following question of law for the opinion of this court under section 64(1) of the Estate Duty Act, 1953 (for short, "the Act"): "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the firm, M/s. Khanna and Hari Raj, had a goodwill which passed on the death of Shri Shivraj Singh?" For the purpose of deciding the aforementioned question, we may notice the relevant facts. M/s. Khanna and Hari Raj of which the late Shri Shiv Raj Singh (predecessor-in-interest of the accountable person) was a partner, was carrying on business as selling agent of vegetable products of M/s. I.V.P. Ltd. For this purpose, it had entered into an agreement with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. His application was rejected by it vide order dated January 12, 1988. Shri S.C. Nagpal argued that the findings recorded by the Tribunal on the issue of goodwill of the firm are self-contradictory and are based on misreading of evidence produced by the parties and, therefore, the question framed by the Tribunal may be answered in favour of the accountable person. He referred to paragraphs 7 and 14 of the order dated October 23, 1986, and para. 4 of the order dated January 12, 1988, to show that the Tribunal was never certain about the goodwill of the firm-M/s. Khanna and Hari Raj and, therefore, there was no occasion for it to uphold the finding recorded by the Appellate Controller. Dr. N.L. Shardha, counsel for the respondent, argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CEPT [1961] 41 ITR 500 (SC); Smt. Vindoor Bai v. CED [1981] 132 ITR 421 (All); CED v. Kanta Devi Taneja [1981] 132 ITR 437 (Gauhati); Mahabir Prasad Poddar v. CED [1976] 104 ITR 612 (Patna); Smt. Kamlawati Raizada v. CED [1976] 105 ITR 703 (All) and K.A. Subramaniam v. CED [1962] 46 ITR (E.D.) 1 (Mad), the court culled out the following principles: "(i) The goodwill of a business is an intangible asset. It is the advantage or reputation and location found with the customer. It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years because of its reputation, location and other features. (ii) The goodwill is comprised of a variety of elements. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to examine the ancillary issue relating to the value of Shiv Raj Singh's share in the goodwill. In his order, the Appellate Controller noted that M/s. Khanna and Hari Raj of which the late Shri Shiv Raj Singh was a partner had been working as a selling agent of the vegetable products of M/s. I.V.P. Ltd., since 1972 and the agreement entered into between the two was being renewed from time to time. He noted that as per clauses 11 and 12 of the agreement which was in force at the time of demise of Shiv Raj Singh, the agreement could be terminated before the expiry of five years, but, in fact, it was never terminated. He further noted that the agency given to the firm-M/s. Khanna and Hari Raj, was not transferable without the consent of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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